Font Size: 
Judge Names Receiver in Madoff Feeder Fund Suit
New York Law Journal
July 02, 2009
Goodwin Procter partner David B. Pitofsky was appointed Monday as receiver of the $1.7 billion Ascot fund put together by financier J. Ezra Merkin, almost all of which was invested with Bernard L. Madoff and lost.
Justice Richard B. Lowe appointed Pitofsky receiver in a lawsuit (People of the State of New York v. Merkin, 450879/09) brought by the New York attorney general's office seeking recovery from Merkin of $2.4 billion in his client's funds which he had "recklessly" invested with Madoff despite "clear warning signals" that the funds were being mishandled.
Also Monday, Lowe approved the sale of $310 million worth of Merkin's artwork, including works by Mark Rothko and Alberto Giacometti, to an unidentified private buyer, which will result in a net amount of $192 million being placed "in escrow to secure cash funds that could contribute to a resolution" of the lawsuit, according to a letter submitted to the court by David A. Markowitz, the chief investigator of the attorney general's investor protection bureau.
Pitofsky, a former deputy chief in the Eastern District of New York U.S. Attorney's Office, will have as his principal task the initiation of litigation against third parties, aside from Madoff, who may be liable for the lost funds.
In May, Lowe appointed Bart M. Schwartz, a former head of the Criminal Division in the Southern District of New York U.S. Attorney's Office, as receiver of two other funds put together by Merkin which totaled $2.7 billion. About one-quarter of those funds were lost in investments with Madoff, according to the attorney general's lawsuit.
For more coverage of the Bernard Madoff case, see the Law.com Madoff Watch page.
For continuous updates, follow Law.com's Madoff Watch on Twitter.
